Wednesday, September 21, 2011

Evolutionary rationale for positive illusions.

Johnson and Fowler offer a fascinating explanation for why 70% of us (and 90% of college professors) feel we are above average in physical skills, intelligence, leadership, importance to our groups, driving skills, healthiness of our behavior, etc. etc. The authors make the striking suggestion that biased self-beliefs can actually lead people to make the right decision, whereas unbiased self-images would lead to a suboptimal decision. In their model overconfident populations are evolutionarily stable over a more wide range of environments than realistic populations, and they suggest this "may help to explain why overconfidence remains prevalent today, even if it contributes to hubris, market bubbles, financial collapses, policy failures, disasters and costly wars." Here is their abstract:

Confidence is an essential ingredient of success in a wide range of domains ranging from job performance and mental health to sports, business and combat. Some authors have suggested that not just confidence but overconfidence—believing you are better than you are in reality—is advantageous because it serves to increase ambition, morale, resolve, persistence or the credibility of bluffing, generating a self-fulfilling prophecy in which exaggerated confidence actually increases the probability of success. However, overconfidence also leads to faulty assessments, unrealistic expectations and hazardous decisions, so it remains a puzzle how such a false belief could evolve or remain stable in a population of competing strategies that include accurate, unbiased beliefs. Here we present an evolutionary model showing that, counterintuitively, overconfidence maximizes individual fitness and populations tend to become overconfident, as long as benefits from contested resources are sufficiently large compared with the cost of competition. In contrast, unbiased strategies are only stable under limited conditions. The fact that overconfident populations are evolutionarily stable in a wide range of environments may help to explain why overconfidence remains prevalent today, even if it contributes to hubris, market bubbles, financial collapses, policy failures, disasters and costly wars.